« June 2012 | Main | August 2012 »

July 2012

HR CYNICS UNITE: The AllState Claims Guarantee (Paying People to Leave)

For those of you that don't know, I'm a runner.  No races, just like to get out and reduce stress by going 4 miles or so.

These days - I'm listening to a lot of Pandora when I run.  I use the free Pandora service, which means I Allstate-GPS-Mayhem get fed a 30 second ad every three to four songs.  The ads are usually the same time after time, which means I have a lot of time to think about what the hell they're pitching.

The big one being played now is the "Allstate Claim Satisfaction Guarantee".  The basic jist of it is this - if you're an AllState customer and you're unsatisfied with how a claim is processed, they'll give you several months of premium payments (whatever your rate is) and let you leave.  Sounds like a great deal, right?  If I'm not satisfied, they'll PAY ME TO LEAVE.  Nice.

But wait a second - that's just smart business.  Let's say you have a crazy wreck that they can't deny the claim on, but it shows you're clearly a negligent wildcard.  They pay 60% of what they should have on the claim, you complain and cite the guarantee, and viola - they pay you out and let you leave.  You cited the guarantee, they gladly paid you out and removed a crazy person who their research shows clearly will run up multiple claims in the years that come - a customer they lose a lot of money on. 

Sure you can go.  Here's your guarantee money.  Don't let the door hit you on the ##$ on the way out.  

Wait - we messed up on the claim and you're not a crazy person?  Let us evaluate your lifetime worth and future propensity to put a bunch of claims into the system.... Oh, you're a decent customer, even though you're making a claim now - we'll increase the payout on this claim to keep you.

The claim satisfaction guarantee is a great way to remove bad customers - i.e., the ones that aren't

Zappos has always done the same thing with the "we'll pay you 2k to leave after training, no questions asked".  Because if you'll take 2K to leave after training, you were going to be a net negative anyway.

The satisfaction guarantee.  My gut tells me we should do more of these at various points in the talent cycle in our organizations.  Nobody likes Mayhem - like you.  

M&A FOR HR PLAYERS: Cost Per Customer...

Hey Kids, Can I Have Your Attention? (Quick - name the band, song and shooter game that features the the lyric and song... If you have teenage sons, they know the lyric... I'll throw the answer in the comments tomorrow...No Googling!)

But I digress... Shooter games, pop culture, technology. Let's get out of the normal HR world and talk Instagram-20101006-102306 about some metrics that can make you look smart when your company (small or large) is thinking about an acquisition.

Let's talk about Cost Per Customer...as it relates to M&A activity...

You heard that Facebook bought Instagram for over a Billion dollars right? Your first reaction was probably like mine - what were they smoking? That was actually your second reaction. Your first reaction was "how can I start a company like that and get PAID, yo...." So you think that price is crazy talk, right? Maybe. Maybe not.

One way to think about it in basic terms is cost per customer. It's a free service, but Instagram has 35 million users, so at a billion dollars, that works out to something like $29 per customer/user. Do you think Google overpaid a few years back for YouTube? What about Amazon overpaying for Zappos? And let's not forget the deal that made Mark Cuban a billionaire, Yahoo's purchase of broadcast.com. What were those deals worth from a cost per user/customer basis? Here's what the acquisition price says the same metric on those deals works out to:

--Zappos: Amazon looks to have bought them for $206 per user/customer (interesting since we know Zappos has revenue and I'm assuming they're profitable)

--YouTube: Google looks to have bought them for $49 per user (hmm. A little more apples to apples)

--broadcast.com: Yahoo paid a whopping 11,000 per user by my math (good bless Mark Cuban, a hard working guy who walked into one of the sweatest deals via timing and a bubble)

So based on those numbers, did Facebook overpay? I'm not sure they did, and after seeing the way kids are using Instagram both for pictures and as a social network on a recent vacation, I'd say they didn't.

Add cost per customer to your toolkit. Some interesting stuff results when you look at the world this way. You don't have to be right, you just have to have an opinion based on the language.

That's all it takes to look different from 95% of the other HR pros out there.

Post inspired by data at thebuildnetwork.com.

HRPA to SHRM: We Don't Need No Stinking Standardized HR Metrics...

Some of you may be aware that there's a big SHRM initiative underway to standardize different HR and Human Capital metrics across all companies.  On the surface, it's a noble cause.  Here's the feel good description of what's going on from from BusinessWeek:

"A group of 600 HR managers, academics, and advisers are drafting guidelines for standardizing measures of workforce diversity, turnover, job training, and the like. They are also drawing up a template for how companies should report such information to shareholders. Those involved in the project argue that companies and investors would benefit if a single set of metrics were used to gauge what they call “human capital.”

“In the financial-services sector, my supply chain is human capital—it’s relationships, it’s ideas,” says Erika Karp, head of Global Sector Research at UBS Investment Bank, who has been involved in devising the standards. A stockpicker choosing between two banks should favor the one that spends more money training and rewarding its employees, thereby lowering turnover, which is costly, Karp says. Investors will also gravitate to companies with a deep leadership bench. With the metrics, “you have more transparency on factors that result in better profitability,” she says. “It’s what a reasonable investor would want to know.”

Of course, no good deed goes unpunished.  By creating a platform that threatens to standardize, and therefore require, the collection of data and reporting of metrics along the lines of financial metrics to Walll Street, there's the predictable "give me freedom or give me death" call related to an implied threat that these metrics could be included in future regulatory burdens.  More from Business Week:

"The project, which is being spearheaded by the 250,000-member Society of Human Resource Management (SHRM), has drawn fire from the HR Policy Association (HRPA), a lobbying group whose members include the top HR officers at more than 300 of the largest companies in the U.S. HRPA says the reporting standards would place an unnecessary burden on public companies, which are already shouldering a mountain of paperwork under Sarbanes-Oxley. Information on how much time and money companies spend on training and what kinds of workers they are hiring would be less valuable to investors than to rivals, HRPA representatives say. “These are all things the competition would love to know,” says Tim Bartl, a senior official. While most companies would agree they need to have a succession plan, a requirement to name candidates for the top job would irk some, says Peter Cappelli, director of the Center for Human Resources at the Wharton School. “In a lot of firms that particular question isn’t even known to the participants.”

I like the cause/drive to standardize, but I'm not sure I want SHRM to be the ones to blaze the path.  Still, it's easy to bitch and moan that we need better metrics and then be against this type of movement.  Seems like folks like me should either get involved and help determine the solution or stop complaining like the HRPA is doing.  Of course, no one told me that there was a viable threat of this creating an involuntary reporting burden, with that reporting potentially being reported across public companies?  Check please - I'll pass if that's the case.

Lies, damn lies and statistics.  Applause to SHRM for trying to bring us all to one language.  A wagging finger to the same organization if the plan was ever to mandate the reporting standards to public companies. Metrics like turnover numbers and the like mean nothing without industry, geographical and workforce context.

VOTE: Help Me Name My New Office

So here's the deal.  We're moving in a week to new space at my company - Kinetix.  Going to be pretty cool space, and as part of the deal we're naming every space, including common areas.  We've decided to open it way up - so the names for the meeting rooms, a few offices we have and the common areas for brainstorming are going to be named after Pop Culture references.

Pop Culture is a broad naming convention, but I like it.  It means that most of the spaces are going to be references to movies, music or things that resonate in our daily lives.

I need to name my office.  Will you help me by voting?  Here's the candidates for what my office (which is going to serve as a meeting room when I'm not there, which is often) may be called (links to the reference points included):


-It's Tricky

-Tremendous Upside

-Save Ferris

-Dude Abides

Vote for me in the comments with why you like the one you voted for in the comments.  Got a better one?  Put it down as well.  Thanks for the help.

CAPITALIST WEBINAR: Bootstrap Your Employment Brand By Figuring Out What Your EVP Is...

It's time you figured out what your EVP is.  Not your employment brand.  That's what you think it is - I'm talking about your EVP.  The Employer Value Proposition, which is what the people who matter think about "what's in it for me to work for your company?"  Which is your real brand, whether you realize it or not.

Confused?  Don't be. Just join Steve Boese and me as we deliver Bootstrap Your Employment Brand the FOT Way this Thursday at 1pm Eastern time - we'll serve up the following: TMJ-Badge-Registration

  • A Quick-Hitting Approach to Building Your EVP.  Forget what you think your employment brand is.  If you took a poll of managers, employees and candidates, what would they say is in it for them in exchange for working for you?  We're going to break down a low cost way for you to determine your EVP and get some fresh ammo for your recruiting brand.
  • How to Create Cool Content to Support Your EVP.  It’s easy to say that you’re going build content to support your EVP.  Problem is, you say that, then work happens and you look up and you’ve gone another quarter without doing much of anything.  The FOT team will walk you through how to develop a low-cost, low-pain way to develop quick hitting content that supports your EVP.
  • What You Should Focus on When Gauging Your ROI, Ignoring Clicks and Other Measurement Gibberish. Your message is out and the feedback is rolling in, but how do you filter the relevant from the noise? FOT will bring in TweetMyJobs Co- Founder, Gary Zukowski, to tell you what really matters when it comes to measuring your return on investment in relation to your employment brand – it’s more than click deep.
  • 2-Way Conversations or How to Eat the Dog Food and ease it down with a Kool-Aid chaser.  We’ll wrap up the webinar by walking you through how smart companies get team members fully engaged with the EVP and on the frontlines of building a talent pool that wants to work for you.

Don’t call it a comeback – your EVP has been there for years.  You’ve just never asked the right questions to figure out what people think is in it for them to work at your company.  Join FOT and Tweet My Jobs for this webinar and we’ll show you how to determine your real employment brand via the EVP and share it with the world.

Register today!

Steve Nash: More Evidence That Mobile and Social Make Your Company's Brand More Accessible/Attractive...

Of course, to be accessible you have to give up a bit of control, right?

Case in point.  Steve Nash.  Nash is an employee of the Los Angeles Lakers, recently traded from the Phoenix Suns.  My sons are big Suns fans as a direct result of Nash being with that franchise for years.

Traded to the Lakers?  I'm not sure if we can be Lakers fans in my house.  We'd be kind to Nash, but fans of the Lakers?  I don't know...

Then that changes - mainly because Nash is an employee of his new company (the Lakers) and he knows how to be accessible to customers by mashing up a mix of mobile and social.

Check out this video (taken by Nash from his phone) of interaction with LA citizens on a SoCal freeway:


That's right.  Nash filmed himself in a cab taking a Keystone Light from some renegades on an LA Freeway after they recognized it was him.  See the crazed look of delight in their eyes?

We're in.  Order up the Lakers gear.  Due in part to an employee (Nash) being accessible and capturing stuff to represent the brand in a way that a Madison Ave. firm couldn't come up with in a million years.

Mobile+Social+Freedom for your company employees/agents can = Gold.

Instagram: On Vacation I'm Like Margaret Mead, Yo...

Wrapping up a vacation at the beach, and I'm here to report one thing.

Instagram would seem to be for real.  But probably not in the way you think it is.

Backstory - vacation at the beach with another family.  2 3rd Graders, 2 6th Graders and 2 Sophomores along for the ride.

Observation - heavy, heavy Instagram usage by the two youngest age groups in Instagram, and they're not using it to share and filter pictures so much.  They're using it as a social network.  They may share a picture here and there, but they're much more likely to share another picture they've found anywhere - just to do a post and get a conversation started.  

Oldest group - Facebook usage trending down, Instagram strong and Twitter starting to make a dent.

If you're a parent of young one and they ask if they can get a Instagram account, it's not just all about pictures - they're really using it as a texting service of sorts.  Do with that what you will.

Margaret Mead - out.

The Five Dysfunctions of #SHRM12

(Note from KD - Today may be the first guest post in the history of the HR Capitalist, and it comes from one of my favorite HR executives in the country - Doug Dean, who gets it like you and I want HR leaders to get it.  This is his review of bloopers at the SHRM national convention.  Read on and check out Doug's bio at the end, look him up on LinkedIn and connect...)

In the waning hours of last week’s SHRM ’12 conference in Atlanta, I was goaded into a playful bet by three long-time HR colleagues.   The bearer of the short stick, we agreed, would publish to the HR Dean1 blogosphere a “worst of” from the SHRM ’12 conference.

Not surprisingly, Lady Luck chose to smite me again, reminding me of the folly of praying for humility.  And so it is that I have the unenviable task of weighing in on those few – and there were precious few indeed – moments from the SHRM ’12 conference which may have elicited shouts of ‘Cut!’ from the director had the conference been a film production.  

Call it an HR Festivus for the rest of us - an airing of grievances for a miniscule minority who witnessed actual human imperfection at SHRM ‘12.  Conference Grand Pooh-Bah of Comedy, Jerry Seinfeld, would insist on the Festivus, whose few invitees stand against the thousands-strong SHRM ‘12 attendees whose faces beam with irrational exuberance, armed as they are with HRCI credits to slay the corporate dragons of dysfunction and assume their rightful place at the table of strategic banter.  

So without further bloviation, let the airing of grievances commence!  

One.  Patrick Lencioni’s Indian Dialect

Lencioni was his usual inspiring and quick-witted self as a presenter, until that one moment that he resoundingly was not.   Generously encouraging audience members to interrupt with questions, Lencioni paused to field one from a gentleman.  The question rose up through the audience microphone, in the questioner’s distinct Indian dialect.  Straining to overcome the room’s reverb and echo problems, Lencioni could not decipher the question.  And like Anchor Man Ron Burgundy’s bad choice of soured milk, Lencioni opted for humor.  “I’m sorry, but the echo is so bad in here,” responded Lencioni, “that all I heard was {here Lencioni attempts a poor impersonation of the question in unflattering Indian dialect}.”

Suffice to say that the attempted humor misfired like a scud missile warhead loaded with two tons of awkwardness.  We all knew Lencioni meant to entertain, not embarrass, so he gets a mulligan.  Dean2

But what we heard and saw was not funny, and came off closer to a public humiliation of a person of Indian ethnicity and language.  Lencioni is at his core a fine human being, an HR Superhero, so which one of you slipped a Kryptonite mickey into his soda?  Patrick, you can right this minor wrong with but one simple act of contrition – wear a tee shirt with the SHRM India logo at your next speaking engagement.  Yes, Mr. Lencioni, India is that important to SHRM, and to the HR profession.

Two.  Malcolm Gladwell’s Manners and Inner Art Garfunkel

Look, we southerners know we’re social antebellum relics, and that you visitors from NYC and LA just wouldn’t understand.  But when you come down here to sit a spell, show your manners.  Mr. Gladwell, Dean3 when in Atlanta, do as the Atlantans.  If you will not whine about it being three years since SHRM invited you to present at the conference, then we will not ask pertinent, searching questions in our southern drawl about that little “stipend” you command that is the annual household income of half of America.  Bless your heart.  

And while I’m at it, having a microphone in your hand is only part of what goes into being an actual rock star.   Gladwell, the consummate storyteller, offered a poignant story of Paul Simon and Garfunkel’s song, “Sounds of Silence”, and how the original recording flopped, until a producer rearranged it using electric guitar and the song rocketed to # 1.   Cool story, Bro.  

Then Malcolm, bless his heart, treated the audience to a few bars of the song.   Keepin’ it real, dog, I thought you were a tad pitchy.  What was sublime, however, was Gladwell’s implied rock star self-parallel to Art Garfunkel (note their identical appearance).  Using my powers of thin slicing (see Blink), it was transparent that Malcolm was sending subliminal messages to the heavily female audience, which he confirmed in his lamentation that those of us over age 35 missed out on the modern Gen Y phenomenon of pulling off over 200 dates in a single year by going public through social media.

        Three.  Seinfeld Skewers the “Society”

You just knew that the comedic genius of our times, Jerry Seinfeld, would laser immediately in on our admittedly pompous brand name, “Society”.  “The SOCIETY,” Seinfeld would quip, “could start a new planet.  We could just scoop all of you up, take you to another planet, and start all over again.  Because you all excel at UNDERSTANDING people, and what they can DO.  And SOMETIMES, what they CAN’T do.  Sometimes, the SOCIETY of Human Resource Management says, PACK UP YOUR STUFF AND GET OUT!”

Comedians help reveal through our laughter where we look really foolish, and I hold that if language creates reality, I’m not sure I like what the name “Society” evokes, but I joined the entire audience in laughing until I cried. 

Simple question, when explaining to a non-HR acquaintance what “SHRM” stands for, do you wince at the first word, or do you proudly belt out “Society”?    

Four.   Didn’t We Figure Out the HR Competencies Back in 2008?

Seriously, a newly constructed “HR Competency Model”?  This one was presented by SHRM’s Alexander Alonso, and I’m sure it’s swell, but I had the same feeling as I used to walking through Sears, wondering what they did with Roebuck ($1 to George Carlin).   Just when you thought HR superhero Dave Ulrich, et. al. had built the definitive competency model (circa 2008), from talent manager, to change steward, to strategy architect, business ally, and credible activist.  Ulrich, you’re fired - out with the old model, in with the new, with its business acumen, consultation, relationship management, and my favorite, impactful communication.  Just when I had become competent, snap back to reality, Oh, there goes gravity.

Five.   Sweating the Petty Atlanta Stuff

Or was it petting the sweaty stuff?  The glorious, yet heavily overpopulated city of Atlanta managed the SHRM mass of humanity about as well as I expected, but it still pegged the traveler’s misery index.  Buses moving at a glacial pace, Atlanta Hartsfield-Jackson Airport, and sweltering heat.  And apparently, the World Congress Center has an escalator maintenance labor union strike it is working to resolve. 

So there it is, bettor’s debt settled!  Two Thumbs Up anyway, Atlanta and SHRM!  You undercharged me, and I’m dropping a check to the SHRM Foundation forthwith!

The Bio: Doug Dean, CCP, SPHR is a native of Birmingham, Alabama and has served as Chief HR Officer Dean4 at Children’s of Alabama, the 3rd largest pediatric healthcare provider in the U.S. since 1999.  He earned his HR cred on the mean streets of compensation and benefits practice in the healthcare, insurance and banking industries, and as such, may be a misfit in the generalist practice of HR.  His passions extend beyond the realm of pursuing HR excellence and into the dark recesses of North America and Canada, where he lives large as an avid outdoorsman when he is not following or writing about his beloved Auburn Tigers. 

Economics for HR Geeks: The Quitter's Index

Take a look at this graph.  Let's talk after the jump:

Quitter's index

-White line is the number of people who voluntarily quit their jobs fromm 2001 through 2012.

-Yellow line is the number of people who were fired/laid off in the same time period.

Observations: From 2001through late 2007, people were pretty damn confident in their ability to find a job.  Then in late 2007-08, that line flat-lined.  People wouldn't move, because the economy created a fairly severe external locus of control when it came to their careers.

Now look all the way to the right on the chart.  That white line confidence is starting to come back.

Talent is becoming more open to moving.

Get your ##@# together so you can compete for it.

(h/t to the Big Picture)



Stack Ranking vs. Coaching for Greatness in Performance Management

Don't kid yourself - stack ranking and forcing a distribution in performance management is the easy way out.  It's much harder to create a culture where managers are expected to have coaching conversations with depth, to take the time to really dig into what good vs. great performance looks like in any area or overall.

Vanity Fair's pointing to stacked ranking as a "company" performance problem at Microsoft.  Here's a clip from the article on problems in Redmond:

"Eichenwald’s conversations reveal that a management system known as “stack ranking”—a program Celebrity-apprentice-boardroom- that forces every unit to declare a certain percentage of employees as top performers, good performers, average, and poor—effectively crippled Microsoft’s ability to innovate. “Every current and former Microsoft employee I interviewed—every one—cited stack ranking as the most destructive process inside of Microsoft, something that drove out untold numbers of employees,” Eichenwald writes.

“If you were on a team of 10 people, you walked in the first day knowing that, no matter how good everyone was, 2 people were going to get a great review, 7 were going to get mediocre reviews, and 1 was going to get a terrible review,” says a former software developer. “It leads to employees focusing on competing with each other rather than competing with other companies.”

The problem with that isn't so much managing non-performers out, it's the concept that the 7 in the middle see a couple of rockstars in their group and inherently know that there's no way they can get to the top ranking.

Managers assume that too.  So why should they coach hard about what it takes to get to that top level if they can't give them the rating and the rewards to go with it?

It's much harder to start at zero with each employee and coach hard for innovation, discretinary effort and growth in performance.  That's why so few companies try.